The country intends to begin boosting its shipment to awaiting customers once the sanctions are lifted.
Refiners in Asia are now gearing up to purchase more crude from Iran once word has been confirmed that the sanctions have been lifted and oil insurance can once again be purchased internationally for tankers and refineries carrying and processing crude from the country.
Tehran is now working hard to attempt to compete and rebuild its market share within an oversupplied marketplace.
When the deal was finally reached among world leaders, last Tuesday, following over 20 consecutive months of negotiations, it set the wheels in motion to eventually remove the sanctions that have been in place against Iran. Those regulations stated that oil insurance could not be sold by participating nations in order to cover tankers transporting crude from Iran, or refineries that processed it. The sanctions will be lifted in exchange for changes made by Iran to its highly controversial nuclear program.
When the oil insurance returns, Iran intends to place its main focus on selling to Asia, which comes as no surprise.
The reason is that India, China, Japan, and South Korea are already the country’s largest importers of the crude. In fact, since the sanctions went into place back near the start of 2012, those four nations were sometimes the only customers who were purchasing the oil from Iran. Since the deal was struck last Tuesday, Asian refiners and governments have been scrambling to update their information in order to become aware of exactly when they will be permitted to import a larger amount of the crude.
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According to an oil ministry official in India, “If the nuclear deal permits, we will increase our purchases,” adding that “There are refiners like HMEL (HPCL-Mittal Energy Ltd.) who want to buy Iranian oil.”
The refineries, themselves, have said that when the oil insurance becomes available, they “will look at buying Iranian oil”, said Hindustan Petroleum Corp Ltd. head, B.K. Namdeo, who is also hoping that Iran will continue to offer the types of discounts on sales and shipping of the crude that had been provided before.